Title

Earning Preview: Pebblebrook Hotel this quarter’s revenue is expected to increase by 5.20%, and institutional views are neutral hold

Abstract

Pebblebrook Hotel Trust will release its quarterly results on February 25, 2026 Post Market, with consensus pointing to a narrower loss, modest revenue growth, and an improving operating backdrop as management tightens costs and recent refinancing extends maturities and reduces interest expense.

Market Forecast

The market is looking for Pebblebrook Hotel Trust to deliver revenue of 347.78 million and adjusted EPS of -0.30 in the current quarter, implying year-over-year changes of 5.20% for revenue and 28.08% for adjusted EPS; EBIT is estimated at 4.89 million, up 147.89% year over year, while margin projections were not disclosed. The Rooms business remains the largest revenue contributor and should anchor performance with disciplined rate management and occupancy optimization, while Food & Beverage is supported by banquet and event activity attached to group bookings. The Rooms segment generated 254.61 million last quarter; YoY segment data was not provided, but it continues to exhibit the most durable revenue base relative to other lines.

Last Quarter Review

Pebblebrook Hotel Trust reported revenue of 398.72 million, a gross profit margin of 26.15%, GAAP net profit attributable to the parent company of -33.07 million, a net profit margin of -8.29%, and adjusted EPS of -0.37, with revenue down -1.44% year over year and adjusted EPS down -254.17% year over year. A notable highlight was a modest top-line outperformance versus internal estimates, with revenue exceeding the estimate by 0.67 million. Main business performance reflected Rooms revenue of 254.61 million, Food & Beverage revenue of 96.24 million, and Other revenue of 47.87 million; YoY segment-level changes were not disclosed.

Current Quarter Outlook

Rooms Segment

The Rooms segment remains the core engine of Pebblebrook Hotel Trust’s earnings power and is expected to shape the quarter’s trajectory. The latest forecast implies total revenue of 347.78 million, a sequential step-down from the seasonally stronger prior quarter and a year-over-year increase of 5.20%, with Rooms as the largest contributor to that print given its 254.61 million base last quarter. Rate and mix are set to be the primary levers, with management likely to emphasize price discipline in urban and lifestyle properties while smoothing weekday and weekend demand patterns to sustain occupancy. A return to positive EBIT in the quarter, implied by the 4.89 million estimate, should be supported by Rooms flow-through if operating costs are contained and staffing is optimized to match demand. The segment’s conversion will depend on effectiveness in managing repair and maintenance costs, utilities, and housekeeping labor, which were pressure points in the prior quarter’s negative net margin. With adjusted EPS projected at -0.30, the degree of operating leverage achievable from Rooms will be central to narrowing the loss, especially if rate integrity is maintained across peak shoulder weeks. YoY segment growth rates were not disclosed, but given Rooms’ scale and profitability mechanics, incremental rate improvement and occupancy resilience would be the key variables enabling EBIT and EPS stabilization this quarter.

Food & Beverage Segment

Food & Beverage is positioned to complement Rooms with banquet, catering, and outlet contributions, and it posted 96.24 million last quarter. As group-related business returns across conferences, weddings, and corporate off-sites, F&B revenue attached to room blocks can bolster property-level margins through ancillary sales. This quarter’s margin uplift from F&B will hinge on disciplined cost of goods management, improved labor scheduling, and careful menu engineering to mitigate commodity volatility. The segment’s contribution also benefits from calendarized event pacing, where high-attendance weeks support broad utilization of catering operations and venue spaces. Despite the typical seasonality in the early months of the year, operational focus on optimizing banquet mix can keep outlet utilization healthy and add stability to total revenue alongside Rooms. If F&B maintains tight control of variable labor and aligns procurement with event cadence, flow-through should improve, contributing to the quarter’s move to positive EBIT. While YoY growth for this line was not provided, execution quality on events and the synergy with Rooms mix could make F&B the most improved margin contributor in the current quarter.

Stock Price Drivers This Quarter

Three catalysts stand out for Pebblebrook Hotel Trust shares around the print: earnings trajectory, EBIT inflection, and balance sheet actions. First, consensus implies adjusted EPS of -0.30, an improvement on the prior quarter’s -0.37; investors will parse the drivers of this narrowing loss, especially whether cost discipline and rate/mix in Rooms intersect to deliver stable operating profits at the property level. Second, the forecast of 4.89 million in EBIT versus -10.21 million previously points to a material swing; the magnitude and composition of that improvement will be reviewed against operating line items and any one-offs. Third, management’s recent refinancing actions are meaningful: a new 450.00 million senior unsecured term loan, early repayment of near-term mortgages, extension of the remaining 48.00 million portion of the revolving credit facility with restored capacity to 650.00 million through October 2029 (including two optional six-month extensions), and removal of the 10-basis-point credit spread adjustment, which lowers annual interest expense. Those measures lengthen maturities, expand liquidity, and reduce the interest burden, helping support the path to positive EBIT and easing pressure on net margins. Together, these elements shape investor expectations for sustained improvement beyond this quarter, even as revenue steps down sequentially from 398.72 million to 347.78 million on normal seasonal patterns. The degree to which these operational and financial actions translate into clean, repeatable gains in EPS and cash generation will be central to share performance immediately after the report.

Analyst Opinions

The prevailing view among institutions is cautious, with neutral/hold ratings dominating and limited upside implied by price targets around the low teens; the ratio of bullish vs bearish views skews toward the cautious side, with hold stances in the majority. Truist raised its price target to 12.00 on January 12, 2026 while maintaining a Hold rating, signaling recognition of operational progress but an insistence on evidence of sustained earnings improvement before upgrading. Cantor Fitzgerald reaffirmed a Hold rating with a 12.00 price target, reflecting a stance that current valuation is balanced against near-term operating volatility and the pathway to margin normalization. Evercore ISI maintained a Hold rating with a 13.00 price target, similarly seeking proof of consistent EBIT and EPS stabilization before endorsing more constructive forecasts.

These perspectives are coherent with the current quarter’s setup: consensus expects revenue of 347.78 million, adjusted EPS of -0.30, and EBIT of 4.89 million, all implying improvement but not yet a full return to consistent profitability. The outlook still presumes careful execution to turn the positive EBIT estimate into realized gains while managing property-level cost pressures that weighed on the last quarter’s net margin of -8.29%. Analysts broadly acknowledge the significance of the February 12, 2026 refinancing package—extending maturities to October 2029 on the revolver, adding 450.00 million in term debt, and eliminating a 10-basis-point credit spread adjustment—because it bolsters liquidity and reduces interest expense, thereby supporting future net margin recovery. Yet they also emphasize that the quarter’s revenue step-down from 398.72 million to 347.78 million, even with a 5.20% year-over-year gain, leaves little room for execution lapses if the company is to meet or exceed the EPS and EBIT targets. In short, the majority hold view reflects the belief that Pebblebrook Hotel Trust is taking the right financial steps, and the operational groundwork for improvement is in place, but more consistent evidence of margin expansion and EPS recovery is required to shift sentiment to outright bullish.

Looking through the lens of this quarter’s report, analysts with hold ratings will likely focus on three anchors: confirmation of the EBIT inflection to 4.89 million, the quality of the adjusted EPS trajectory toward -0.30, and concrete margin actions inside Rooms and Food & Beverage that can carry into subsequent periods. Details around revenue mix—especially the balance between transient and group nights, the pacing of events that support F&B, and property-level productivity—will be key to their post-report assessments. Confirmation of sustained benefit from the refinancing, including realized interest savings from the removal of the credit spread adjustment and improved access to revolving capacity, will buttress arguments that the balance sheet can support operational investments without tightening liquidity. If reported results align with these expectations, the cautious consensus can remain intact while leaving room for upgrades contingent on consecutive quarters of EBIT and EPS delivery. Conversely, if the EBIT improvement falls short or adjusted EPS deviates materially, the hold stance could harden, as the majority view has already expressed the need for operational consistency. The net of the institutional commentary is clear: Pebblebrook Hotel Trust has engineered an environment conducive to improvement, and investors will be watching for tangible, repeatable advances across Rooms and F&B to validate the uplift embedded in this quarter’s forecasts.